Britain’s negotiations to leave the European Union formally began on 19 June, but it is still unclear what impact the unexpected result of the UK’s general election will have on the process. Julian M Hoerner indicates that from the EU’s perspective, little has changed following the election as the EU had already decided on its negotiating position in advance. However, he argues that the victory of Emmanuel Macron in the French legislative elections could ultimately make concessions for the UK less likely.

In 2017, citizens in the three largest EU member states have gone (or are due to go) to the ballot box. The general election in the UK was followed by the French legislative elections, while in September, Angela Merkel is facing German voters in her bid to become chancellor for the fourth consecutive time. One of the most pressing issues facing the EU is of course Brexit. And the outcome of this year’s elections in these three key member states will have a significant impact on the way the Brexit negotiations are conducted and the potential outcome.

Contrary to most expectations, Theresa May could not increase her majority in the UK’s election and is now dependent on the Democratic Unionist Party (DUP) to govern. Even though in some respects to the right of the Conservative Party, the DUP has arguably a preference for a ‘softer’ Brexit given Northern Ireland’s close trade links to the Republic south of the border. Moreover, the strong performance of the Scottish branch of the Conservative Party with their socially liberal leader Ruth Davidson could potentially influence the balance of power within the party. Finally, against expectations, the Labour Party, which has a more ambivalent position on leaving the EU, increased its seat share, as did the decidedly pro-European Liberal Democrats.

This was certainly not the outcome Theresa May hoped for when she called the elections in April. Her stated aim was to get a ‘strong and stable’ majority to bolster her position in the Brexit negotiations. With this plan having failed spectacularly, some commentators now see the potential for a ‘softer’ Brexit, involving closer trade links and membership of the customs union. Whether this is feasible is far from clear, as is the issue of whether Brexit actually featured prominently in the minds of most voters in the election. It is certainly premature to argue that ‘hard Brexit’ is not the most likely outcome anymore.

Nevertheless, the result of the election and the ensuing discussions have certainly been closely followed in European capitals, and might thus have an impact on the approach EU leaders take in the negotiations. But the impact of the election should also not be overstated in this sense. Angela Merkel made clear that she expected Brexit negotiations to go on as planned, stating: “Currently I don’t see anything standing in the way of negotiations starting promptly – as was agreed and promised”. Negotiations duly began on 19 June, but the outcome of the election has generated uncertainty. German public opinion, generally pro-EU, is rather sceptical when it comes making significant concessions to the UK in any Brexit deal.

Merkel’s competitor for the chancellorship, former President of the European Parliament, Martin Schulz (SPD), is even more in favour of deepening integration than Merkel and is therefore less likely in principle to make concessions. At the same time, senior figures such a Sigmar Gabriel, Minister of Foreign Affairs, and Germany’s EU Commissioner Günther Oettinger, have urged the UK to rethink its positions and see the election result as opening up potential for closer cooperation. Wolfgang Schäuble ,Minister of Finance, even stated that the UK was welcome to stay an EU member should there be a change of mind. In any case, major decisions or changes in strategy cannot be expected from the German government until after the federal elections in September.

Emmanuel Macron’s victories in the French presidential and legislative elections suggest that France and Germany could again become the drivers of reform and further deepening of the European Union. Chancellor Merkel has already congratulated Macron on his strong mandate for reforms and hinted at some change in German policy regarding austerity measures and a renewed commitment to deeper integration in exchange. Macron ran his campaign on a decidedly pro-European platform, which for him is central to the modernisation of France. Any concessions on issues such as free movement cannot be expected from him. Therefore, the victory of Macron’s centrist party might well reinvigorate the Franco-German engine, strengthening the EU’s negotiation position.

The European Commission itself reacted to the outcome of the UK’s election by emphasising the need to start negotiations as quickly as possible and to stick to the agreed timetable. Chief Negotiator Michel Barnier urged the UK government to come to the negotiation table in order to meet the Article 50 deadline of March 2019. Any changes to the EU’s agreed negotiation position would likely take months. The official message from Brussels has therefore been that, irrespective of the election outcome, negotiations should proceed as planned.

The impact of the UK’s election on the process should thus not be overstated, at least in the short run. At the moment, a fundamental change in the position of the British government is not in sight. Moreover, there is limited evidence that the election was actually a clear vote against ‘hard’ Brexit. Finally, the recent elections in France and upcoming campaign in Germany, in which Chancellor Merkel is facing a decidedly pro-European competitor and a generally EU friendly electorate, could result in opportunities for further deepening European integration in certain areas.

This alone would rule out any concessions that would make ‘soft’ Brexit more feasible for the British government. The situation could change of course depending on the flexibility of the new UK government on issues such as free movement, or indeed a change in government after another election. However, for now, the dynamics of the Brexit negotiations are unlikely to change significantly.

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14 Comments

“It is certainly premature to argue that ‘hard Brexit’ is not the most likely outcome anymore”
“limited evidence that the election was actually a clear vote against ‘hard’ Brexit”

What is this “hard Brexit”? It has no meaning to Leave voters.
Most Remainers use “soft” to mean staying in the Single Market/Customs Union – which isn’t really leaving the EU at all.
(If this is NOT what “soft” means, perhaps we could be told.)

“concessions for the UK”?
As sovereign nation with a large trade deficit, the UK doesn’t really need “concessions” – esp. not from Germany and France – who export far more to us than vice-versa.

Currently the UK has proposed a “concession” … of not charging up to £10billion in tariffs (versus £5-6 billion on UK exports to the EU).

The same imbalance means that Germany and France will want “frictionless trade” to continue, i.e. mutual recognition of standards and customs processing.

Of course, whether EU officials will apply economic pragmatism and (real) job preservation that is in the interests of national governments they are supposed to serve – or preserving their “empire” – remains to be seen.

Thank you, Burns. Quite so. Jules, from 1960 until 1973, the UK and 6 others, including Norway and Switzerland, were members of EFTA. All except Norway and Switzerland later joined the EEC, in either 1973 or 1995. If we now leave the EU, and become an active independent member of EFTA once again, we will be making just as massive a constitutional change as we did at the end of 1972 (one that Edward Heath had to work for for years to achieve). It is just nonsense to say such a move would not really be leaving the EU at all. We undoubtedly would be. Indeed, almost certainly, after a few more years, we would be regretting yet again not being an EU member, just as we were in the early 1970s.

The truth of this is that emulating Norway/Switzerland would clearly be leaving the EU. However, it’s very very difficult to make the argument that this status is an improvement on what we previously had. We’re still tied to the EU and implement most EU decisions but have little to no say over any of it. It’s the best way to mitigate the potential damage Brexit can do to our economy, but to accept that point you first have to agree that Brexit is a problem. Leavers aren’t willing to do that and until they do we aren’t going to get to a soft Brexit.

What they need to come to terms with is that the alternative to a soft Brexit is even worse. The idea that leaving the customs union will allow us to negotiate so many meaningful free trade agreements with the rest of the world that it will compensate for a loss of access to the EU’s market is preposterous. It’s based quite simply on a woeful misunderstanding of how trade functions and what free trade agreements actually are (e.g. the principle that what matters is how many free trade agreements you have, not what they actually say or what concessions you get from them).

Much like an alcoholic at an AA meeting, it’s only once we accept we have a problem that we can do something to prevent further damage. People like Hammond and Carney know fine well that the pragmatic option is to stay in the single market, but we have a hardcore of public opinion that is demanding the impossible: a complete cut of all ties with the EU and some giant leap forward economically at the same time. If politicians continue to pretend that impossible outcomes are achievable then the fallout is going to be severe when reality hits.

It’s hard to work out whether Remainers are themselves misinfomed – or misinform. selectively.

The Single Market is an EU construct including:
– EU Laws
– EU Court
– Right to Settle (a.k.a. Freedom of Movement)

Just because Norway and Switzerland have accepted parts of these – under duress – doesn’t make their arrangements “acceptable”.

From the EFTA website:
“The free movement of persons is one of the core rights guaranteed in the European Economic Area (EEA), ……. as it gives citizens of the 31 EEA countries the opportunity to live, work, establish business and study in any of these countries.”

The vast majority of Leavers were clear about the aims:
– Regain control of our laws so that we could ….
– Regain control of immigration
– Stop paying money to the EU

Why is anyone querying these ?

Burns
June 24, 2017 at 3:10 am

Leaving aside the obvious absurdity in claiming that participating in the single market is the same as EU membership, the polling doesn’t remotely back up what you’re arguing for. The latest YouGov poll on this showed 58% of people would prefer to keep our trade access/free movement (as opposed to 42% preferring to give up our trade access for the sake of ending freedom of movement). Your suggestion that the public are clear in their support of a hard Brexit is just flat out inaccurate.

You’ve also gone down the fairly typical route of pretending that the only people whose views matter are the select group who voted Leave on 23 June 2016. It’s the views of the whole of the electorate that matter and the public simply don’t support what you’re pushing for. It would be hopelessly undemocratic at this point to force a hard Brexit through against the wishes of the public.

So long as Theresa May remains the UK’s Prime Minister, then it is unlikely that her “tone” will change following her and her party’s disastrous showing in the general election. As we have seen too often, she will always insist in response to setbacks that “nothing has changed”, even when evidence of change is all around us. However, the new Parliamentary arithmetic makes change in the UK’s Brexit objectives, and indeed in the negotiations themselves, highly likely.

Before the election there was a clear majority of MPs in favour of the UK remaining a member of the EU and, so far as one can tell at this early stage, that not only continues to be the case, but that majority has probably grown. It has only been cowardice, and/or a failure to understand the responsibility that each MP has, in our unwritten constitution, to exercise and act on their own independent judgment, that has prevented the majority from doing what they believe to be best for the nation. However that may be, the majority’s inaction allowed the hard-line Brexiteers to make all the running after the (wholly unconvincing, for reasons I will not rehearse here) referendum result, leading up to Mrs May’s Lancaster House speech last January when, with no Parliamentary discussion, still less explicit majority support, she adopted the hard Brexit line as the basis for the forthcoming negotiations.

As a result of the election, the worm is at last turning. Many MPs, supported by respected commentators, are saying what has long been obvious: the UK cannot possibly negotiate, and have ratified throughout the EU27, a satisfactory trade deal with the EU before the 2 year Brexit deadline expires at the end of March 2019, and that at least a transitional arrangement will be necessary that allows continued unfettered access to the single market, including free movement of labour. Industry and the services sector are beginning to demand the same, and a significant portion of the public is perhaps beginning to realise that the Leave campaign’s promise last year of an early glorious future free from all EU shackles was pure fantasy.

What seems to be the most attractive option to many, at least as an interim stage, is to revert to an EFTA arrangement, similar to the one we had immediately before we joined the (then) EEC in January 1973, and which Norway of course still has. Hard line Brexiteers will object, not without reason, that if the UK does adopt this, the situation may become permanent and that their aim of total independence will be abandoned, but that is a fight for another day. To all except the small minority of hard line fundamentalists, such a move would also be consistent with the referendum vote for leaving the EU, and – for the first time – provide a compromise that also respected the wishes of the (near) half of the electorate who voted to remain in it. I would be surprised if the new House of Commons did not, within the next few months, require the present, or any replacement, Government to make such an outcome the objective of the Brexit negotiations. It would also be one that M.Macron should have no reason to thwart.

“a clear majority of MPs in favour of the UK remaining a member of the EU”
Plenty of Tory MPs were “reluctant Remainers” – arm twisted by Cameron’s whips.
Plenty of Labour MPs have admitted that, outside the “London bubble”, their constituents thought very differently about sovereignty and immigration.
So …
“that majority has probably grown”
….. seems very unlikely.

” the UK cannot possibly negotiate, ….. a satisfactory trade deal with the EU before the 2 year Brexit deadline”
The EU has been deemed “complex” by Europhiles as long as there have been Euro-sceptics !

David Davis neatly rebutted comparisons with 7 years(?) for a Canada/EU trade deal by pointing out the difference (surely obvious ???) ….
That the UK starts from a position of convergence (product standards, mutual recognition, customs processes etc) that “business-as-usual” should be the easiest line.
It would take an army of (EU) bureaucrats to make things complicated – if they were given longer to f*ck things up !

DD challenged talk of “transitional arrangements”, on the same basis.
The more things stay the same, the fewer(shorter) any “arrangements”.

In short … in the area of Trade … who could possibly want to make things harder ? Not German car-makers.

There is no reason for the other “Single Market” stuff to apply – if it doesn’t apply to the USA and others.

Lastly, may I suggest that you divest yourself of the belief that:
” (near) half of the electorate who voted to remain in it”.

Having canvassed hundreds (if not thousands) I am condident that the largest group of Remainers by far were the “on balance” “slightly worried by the dire economic predictions”.
With the absence of economic armageddon, a much larger Leave vote seems likely.

May I also suggest that, if Remainers are genunely “worried” – why do they not lobby the EU to be flexible about the Single Market “four pillars “?
Seriously, why keep pushing the UK Govt. to cede sovereignty and not push the EU ???

“There is no reason for the other “Single Market” stuff to apply – if it doesn’t apply to the USA and others.”

The point in the single market is to reduce barriers to trade. Saying “there’s no point for the other single market stuff to apply” suggests you’re not really sure what the purpose in the single market is in the first place. That “stuff” (presumably you mean EU legislation) is what gives us free trade. The US doesn’t have the same access as we do because it doesn’t participate in the single market. If you want us to have worse access to our largest export market for the sake of reducing the number of foreigners in the country then you’re entitled to say that. What you aren’t entitled to do is to claim that we can do all of this without it damaging our trade access.

And that, unfortunately, is a point few Leave campaigners seem willing to admit. Instead of being honest about what you’re calling for, you keep pushing a “have your cake and eat it” model, in which we dupe the public into thinking we can pay nothing into the EU budget, ignore all EU legislation, withdraw entirely from the EU’s framework for ensuring states uphold their commitments, impose draconian visa systems on all EU citizens who want to travel/work in the UK, and yet carry on as normal with identical trading access and no economic hit whatsoever.

“The point in the single market is to reduce barriers to trade.”
This was the claim for the Common Market – but the EU-defined Single Market goes way further than is necessary to “reduce barriers to trade”.
If the SM was ONLY about free-trade, we might not be having Brexit !

“EU legislation) is what gives us free trade.”
Only because the EU insists on extra EU laws that affect purely domestic businesses. No other Free Trade Agreements reach into purely domestic activities.

It has been claimed that Norway implements 95% of EU laws – but only of trade-related laws !
Out of around 22,000 EU laws, Norway has implemented about 6,000.
Few (if any) of the 16,000 for internal application – and not 100% for cross-border trade.
Sovereignty in action !

(i)” If you want us to have worse access” (ii) “to our largest export market”

(i) No one wants “worse access” – and if those countries exporting € billions to the UK were allowed to act rationally, access would stay the same.
But the “price” of the SM is too high:
– in payements to the EU
– costs of millions of lower paid EU migrants (on housing, services etc)
– loss of sovereignty

(i) Statistics show that the EU represents about 43% of UK trade.
This should be adjusted down for the “Rotterdam effect” – estimated between 4%-8%.
Trade with Ireland pre-dates the EU – and seems likely to be the most stable, so (almost) disregarded.

So less than 1/3 of trade seems “dependant” on the EU. (…. and much trade would occur without the EU anyway, one wonders the true impact of the EU…..)

“This was the claim for the Common Market – but the EU-defined Single Market goes way further than is necessary to “reduce barriers to trade”….no other Free Trade Agreements reach into purely domestic activities.”

This is a very very common misunderstanding you see with Eurosceptic campaigners. The point in the single market is to come up with shared rules so that businesses in one country can export to the rest of the market without having to adapt their product constantly to comply with different rules and standards in other countries. That’s what the single market does and it doesn’t go “further than is necessary”, it actually doesn’t go far enough: the EU has spent the last few years trying to extend it into the area of services, for instance.

No other free trade agreements go this far because no other free trade agreement provides the level of free trade that you get through the single market. It’s a system not only for eliminating tariffs, but for removing all non-tariff barriers to trade. Non-tariff barriers have a far greater distorting effect on trade in the modern world than tariffs do.

The standard Eurosceptic argument is to claim that the level of free trade that is provided by the single market is identical to any other “free trade agreement” and that the single market simply adds a lot of unnecessary “meddling in domestic affairs” that we can do without. That’s to completely misunderstand what the single market does. We cannot get the same level of free trade with Europe if we trade with the EU in the same manner as a country like the United States does.

If you want to argue we should have less access than we do now and that it would be worth putting barriers between the UK and its largest export market simply to be outside of the EU then that’s fine. It’s self-destructive, deeply misguided, naive, pointless, and reckless in the extreme, but you’re entitled to hold that view. What you cannot keep arguing is that we can leave the single market and continue to have exactly the same trading access with none of the costs in terms of paying into the budget or complying with EU rules.

Well, we can at least agree on our having very different world views. Though not, I’m afraid, on much else. Rather than debate all the points you raise, we should perhaps reconvene in 21 months’ time and compare our present views with what will have happened in the interim.

You contest my mention of “the (near) half of the electorate who voted to remain”. As I see it, 46.62% is pretty damn close to half. You suggest a lot of Remainers would have voted for Leave if they hadn’t been afraid of the economic consequences. I am equally sure that their fears were indeed justified (I concede that Osborne over-egged it with his foolish precision, but the broad warning was correct, as is now emerging), and that Leavers would have voted to remain in droves if they had realised what an economic disaster a full (since you don’t like “hard”) Brexit would entail – and hadn’t unwisely assumed that they could safely give Cameron a bloody nose and that Remain would win anyway without their voting for it.
The fact is that the whole campaign was carried out in the almost total absence of reliable information on what the economic, social and practical consequences might be (e.g. for Scotland and the Union, N. Ireland’s border with the Republic, and Gibraltar, and whether we can, and if so how, replicate in the UK all the admin functions currently carried out for us in EU institutions). The true facts are only now emerging as 29th March 2019 looms. The Cameron government itself hadn’t done any homework on these or any other crucial aspects, without which the referendum was a mendacious farce fuelled by competing emotions. “Ignorant armies clashing by night” just about sums it up. Heaven preserve us from strong, stable governments, if that is how they choose to run the country.

“what an economic disaster a full …… Brexit would entail”
But why a disaster ????
Remainers seem to talk as if “disaster” is blindly obvious – with phrases such as “cliff-edge”.
As David Davis (and others before him) pointed out ….
Why start from the (pessimistic) position of “all-change”?

What’s wrong with starting from an assumption of “business-as-usual” – given that tariff-free access is in the interests of Germany, France and almost all the other 25 ?

With product standards and customs processing already EU compliant – then any “cliff-edge” would be of the EU’s making (and not in the interests of the very many EU exporters, employees, and their politicians)

Surely “as-you-were” provides more …..
“reliable information on what the economic, social and practical consequences”
… rather more than dire forecasts based on unspecified (and unnecessary) changes to a TRADE#-relationship ?
(# EU laws about domestic stuff, Right to Settle and “bribes” for access should have no part in proceedings – and don’t in other FTAs)

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